As recent headlines suggest, economic gloom and extreme volatility have taken their toll on the IPO market. In the month of August alone, 21 US companies nixed plans to go public, 11 of which officially withdrew their filings, the most to do so since the onslaught of the financial crisis. While the immediate effects of the capital market fallout have temporarily halted IPO issuance, behind-the-scenes data suggest a more encouraging outlook.

Deals continue to be completed at a healthy pace, with 96 IPO pricings so far this year, as compared with 87 as of early September 2010 and 31 during the entirety of 2008. Filing activity remains robust, reflecting a still sizeable backlog of private companies and, more importantly, a willingness to move forward in the IPO process. As a result, the US IPO pipeline has surpassed the 200-deal mark for the first time in over a decade. Though global turbulence has stymied IPO plans for some and mandated valuation adjustments for others, recent filing activity suggests going public remains a viable route for a large number of strong candidates, even if market choppiness persists. As such, we remain optimistic that deal flow will resume, characterized by a heightened focus on fast-growing companies with strong fundamentals.
more

US IPO Pipeline

Key Statistics

Sep. 2010

Sep. 2011

Change

Number of Deals†

170

202

+19%

Number of Filings

185

205

+11%

Estimated Proceeds (US$)*

$56.8b

$51.0b

-10%

Number of VC-Backed Deals

42

54

+29%

Number of PE-Backed Deals

42

57

+36%

†Includes all deals that have filed or amended an IPO registration statement within the last two years. Excludes SPACs and companies that have announced acquisitions.
*Based on proposed deal size on file with the SEC; 2010 includes $15b deal size estimate for GM, 2011 includes deal size estimates for ALLY, ILFC, DLPH and CARL.
Source: RenaissanceCapital.com

Attribution Policy: The information contained herein is proprietary and copyrighted. The media is welcome to use our information and ideas, provided that the following sourcing is included:
Renaissance Capital - Manager of IPO-focused ETFs..

Copyright 2011 by Renaissance Capital LLC, all rights reserved. The information and opinions in this commentary were prepared by Renaissance Capital analysts. The report does not constitute an offer to buy or sell any security. Renaissance Capital and/or the IPO Plus Fund may have investments in securities of companies mentioned in this report. The contents of this report may not be reproduced, stored in a retrieval system, or transmitted in any form without prior written consent.

Invest in Global IPO Fund

Performance Disclosure:Past performance does not guarantee future results. The performance data quoted represents past performance and current returns may be lower or higher. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than the original cost. Investors should consider the investment objectives, risks, charges and expenses carefully before investing.

As stated in the Prospectus, the total annual operating expenses for the Fund was 3.48%. The Adviser has contractually agreed to keep net expenses from exceeding 2.50% of the Fund’s average daily net assets for at least a year from the date of the Prospectus and for an indefinite period thereafter subject to annual re-approval of the agreement by the Board of Trustees.An investor cannot invest directly in an index. Index returns do not represent Fund returns. The Index does not charge management fees or brokerage expenses, nor does the Index lend securities, and no revenues from securities lending were added to the performance shown.

Definitions:Net Asset Value (NAV) of the fund is calculated by dividing the total value of all the securities in its portfolio, less any liabilities, by the number of fund shares outstanding. Market Price is current value at which an asset or service can be bought or sold. Premium/Discount is provided to show the comparison of the daily net asset value (NAV) and the midpoint of the closing bid/ask for each of the funds. The Renaissance IPO Index® (IPOUSA) is a stock market index based upon a portfolio of U.S.-listed newly public companies that includes securities prior to their inclusion in core U.S. equity portfolios. The Renaissance International IPO Index® (IPOXUS) is a stock market index based upon a portfolio of newly public companies listed on non-U.S. exchanges. The S&P 500® Index (SPX) is a stock market index based on the market capitalizations of 500 large
companies whose common stock is publicly traded on the NYSE.

Risk Disclosure:Investments in the Renaissance IPO ETF, symbol "IPO", the Renaissance International IPO ETF, symbol "IPOS" (the “ETFs”), and the Global IPO Fund, symbol "IPOSX" (the “Mutual Fund”) are subject to investment risk, including possible loss of the principal amounts invested. The ETFs and the Mutual Fund (the “Funds”) invest in companies that have recently completed initial public offerings. These stocks are unseasoned equities lacking trading history, a track record of reporting to investors and widely available research coverage which many result in extreme price volatility. Due to a greater number of IPOs in certain segments, the Funds may also be subject to information technology and financial sector risk, small and mid-capitalization company risk, and, for the Renaissance International IPO ETF, emerging markets risk. The Funds may hold securities in the form of Depository Receipts, REITs, and Partnership Units which have greater risks than common shares. The strategies have high portfolio turnover and securities lending risks. The returns of the ETFs may not match the return of the respective indices. The ETFs are classified as non-diversified investment companies subject to concentration risk.

Prospectus:Investors should consider the investment objectives, risks, charges and expenses carefully before investing. For a prospectus and/or summary prospectus with this and other information, please visit www.renaissancecapital.com. Read the prospectus carefully before investing. Renaissance Capital Investments, Inc., distributor for the Mutual Fund. Foreside Fund Services, LLC, distributor for the ETFs, 1-866-486-6645.

Attribution Policy: The information contained herein is proprietary and copyrighted. The media is welcome to use our information and ideas, provided that the following sourcing is included:
Renaissance Capital - manager of IPO-focused ETFs.